The uncertainty surrounding geopolitical events and the need for increased efficiency are affecting compliance teams, says a business risk consultancy in its ‘Compliance Horizon‘ report.
In a foreword to the report, The Risk Advisory Group CEO Bill Waite speaks of ‘a very hazy horizon – a vacuum of political leadership, policy, economic and global political certainty’. He says: “No one knows for sure what Brexit will mean or what impact President-elect Donald Trump’s policies will have. But whatever changes in regulation it brings, by putting their house in order now, by creating the right culture, compliance professionals will surely be prepared.”
The Panama Papers leak of April 2016 has clearly had an impact, with the fear of another corruption scandal never far away, the report suggests. As a result, 28 per cent are now much more thorough in how they assess new clients and other third parties, while a further 27 per cent say they may change how they approach due diligence. The report points to the importance of developing a forward-looking, ethical compliance culture. ‘Companies should be wary of falling into the trap that strict adherence to the law in 2016 will protect their business in 2019, or 2023.’ Failing to perform meaningful due diligence may mean that an organisation is indirectly facilitating corruption by assisting in tax evasion and aggressive tax avoidance, corporate secrecy, or corporate and individual financial crime, such as bribery and money laundering,the report warns.
Among the findings:
53 per cent of compliance professionals cited the threat of a recession as the biggest external risk facing their business in the year ahead, with Brexit as their second biggest concern;
80.5 per cent of compliance professionals identified Donald Trump as the presidential candidate who posed the greater threat to the compliance profession; and
73 per cent of the compliance professionals we spoke to think that their budgets will either be cut or stay the same in 2017 and 48 per cent said it would take an internal investigation to drive any increase.
To download the 22-page report visit http://news.riskadvisory.net/2016/15/compliance-horizon-survey-2016/.
